What Is a Tenancy Deposit Protection Scheme?

If you are renting a property from a private landlord, one of the first things you need to do is pay a tenant deposit. This deposit is required by law for tenants renting from private landlords as a form of protection (for tenants) and assurance (to landlords).

Tenant deposits are required from tenants with assured shorthold tenancies that began on April 6th, 2007 in Wales or England. Assured shorthold tenancies typically have a rental fee that is less than  £100,000 per year, and the tenant must be an individual or family (not a company).

Tenancies can only commence after the tenants have given their deposits to their landlords. 

Landlords should register tenant deposits into a tenancy deposit scheme within 30 days after the payment is given to them.

The TDS or Tenancy Deposit Scheme

Landlords are required to protect their tenants’ deposits by registering them with any of the three government-approved tenancy deposit protection schemes (or TDP): Deposit Protection Service, Tenancy Deposit Scheme, and my deposits.

It is important for tenants to learn and understand what tenancy deposit protection schemes are and how they can protect your deposit from being spent unlawfully by your landlord.

Tenancy deposit schemes are intended to protect tenants’ deposits throughout the duration of their tenancy so that the money will be returned to them at the end of the tenancy. The only time that landlords are allowed not to return or deduct a particular amount from the deposit is when the tenants do not meet set requirements.

The TDS is also a useful tool for when landlords and tenants who need to resolve some issues or problems through dispute resolution.  

Northern Ireland and Scotland each have a tenancy deposit protection scheme separate from the ones used in Wales and England.

Tenancy Deposit Protection  options

Tenancy deposits schemes provide landlords and tenants two options for the schemes:

  • The custodial scheme is where landlords are required to register tenants’ deposits to an administrator in a government-approved scheme. The money is kept until the end of the tenancy.
  • The insurance-backed scheme is the option where the landlord keeps the deposit throughout the tenancy but pays the scheme to “insure” the money until the tenancy ends.

TDS requirements

For a landlord to qualify for a TDS, they need to comply with the following requirements:

1. The landlord must be a part or member of the scheme.

2. The landlord must use the TDS tenancy database to register the tenant’s deposit.

3. Landlords should also willingly pay a subscription or membership fee, or a deposit protection charge.

4. Landlords must provide the following information:

  • Landlords and tenants’ contact information
  • Address of the rented property/ies
  • Amount of deposit

Landlords should allow their tenants to check and verify the documents that they submit. Tenants are to sign these documents also to confirm the validity and accuracy of information.

What happens at the end of the tenancy?

Before the deposit is returned, landlords can schedule a visit to the rented property to check the furniture, fixtures, and the entire home. Tenant deposits can only be returned if the property hasn’t sustained any form of damage that doesn’t constitute “wear and tear”, the tenants meet tenancy agreement terms, and tenants pay their bills and rent on time.

If there are no issues or problems, landlords should return the deposit to their tenants within 10 days. If the landlords are unable to do so for any reason, the tenants can file a dispute against the landlords. While the tenancy deposit claims dispute is ongoing, the scheme keeps the deposit safe. It will only be released after the issue is resolved.

Disputes are usually focused on deductions due to property damage and other similar issues. Tenancy Deposit Schemes are also tasked to resolve tenant deposit disputes.

No action from landlords

There are cases where the landlord cannot be contacted as the tenancy is about to end or has already ended. In such situations, a dispute cannot be resolved because of the missing party. The scheme provider can perform several actions if the landlord continues to neglect to respond to their client.

  • The scheme provider can check if there are damages, rent arrears, and other typical deposit deductions.
  • The scheme provider can divide the deposit, giving the tenant (the party present) the equivalent amount allotted to them.
  • The scheme should take note of or record every action taken. Documentation is also important.

If the landlord does not protect tenant deposit

If your tenancy has started but your landlord has not protected your deposit, find a team of experienced and passionate solicitors who can help you file your tenancy deposit claim. Taking your landlord to court will give you the opportunity to file a successful claim. A successful claim means the court will require the landlord to pay you compensation, the amount of which can be one to three times that of what you deposited.

To increase your chances of filing a successful tenancy protection compensation claim, choose a team of solicitors such as the ones at Tenancy Deposit Claims. Their dedicated team will help you through every step of the process. They are highly experienced in dealing with landlords and resolving tenancy deposit issues.